This picture shows Korea Zinc's headquarters in Jongno District, Seoul, Oct. 7, 2024. Yonhap

Proxy firm Glass Lewis on Tuesday expressed support for four nominees for board members of Korea Zinc recommended by the smelter amid a battle for control over the firm between the company chairman and an alliance led by its biggest shareholder, Young Poong.

The Glass Lewis recommendation comes about a week before the world's biggest zinc smelter will hold a shareholders' meeting on Jan. 23 to vote on the appointment of two groups of new board members proposed by Korea Zinc and the Young Poong-MBK Partners alliance.

The board is currently composed of 12 directors. Korea Zinc and the Young Poong camp proposed seven and 14 additional members, respectively, to gain a bigger say in management decisions. The appointment is up for a vote by shareholders.

Glass Lewis asked shareholders to initially vote for the adoption of a cumulative voting system in director elections and limiting the total board size to 19 directors.

If the two proposals are passed and take effect immediately, investors "should cumulate their votes" on four out of the seven nominees, Glass Lewis said in its recommendation note.

The four nominees include Lee Sam Sang-hoon, who previously served as Korea head at Affinity Equity Partners, and James Andrew Murphy, a senior adviser at U.S.-based consulting firm Oliver Wyman.

Glass Lewis said shareholders must choose between two contrasting visions for Korea Zinc at the upcoming meeting.

"On one side, the company has touted its 'Troika Drive' strategy, which focuses on diversifying into new businesses with the stated aim of achieving long-term growth and value creation," Glass Lewis said. "On the other side, the dissident group (Young Poong side) advocates significantly curtailing the company's investments in newer ventures and prioritizing stronger short-term returns."

Korea Zinc has been caught in a monthslong battle against a takeover bid by the MBK-Young Poong alliance, which initiated the management tussle on Sept. 13 by launching a tender offer for an additional stake in the smelter.

In response, Korea Zinc, with the support of U.S.-based Bain Capital, conducted a massive stock buyback.

The Young Poong camp now controls 40.97 percent of Korea Zinc, while Korea Zinc Chairman Choi Yun-beom and related parties own about 34 percent of the company.

The planned "majority" vote on the appointment of board members is regarded as an up-or-down vote on the takeover, with the 4.51 percent stake controlled by the National Pension Service seen as a critically important voting bloc. (Yonhap)